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20 to buying a ticket for an individual seat from a commercial air- priced at about a 40% discount to those with a 1-h departure line, but there is no fixed flight schedule. The price may depend window in the same market. The latter was assumed to be on the number of other passengers actually on board the flight, similar to the prices that would be charged for renting the en- or it could be pre-determined based on the average number of tire aircraft (along the lines of a more traditional charter or passengers the operator expects. There may also be other pric- air taxi service). ing structure variations such as offering a lower pre-determined For the 2012 baseline forecast, it was assumed that the VLJ price if the passenger is willing to travel any time within some mode would be offered with per-seat pricing (and the asso- pre-defined time window. ciated 40% discount) in the following FAA regions: South- These service models have initially sprung up primarily east, Southwest, and Western Pacific. Notionally, these are in the Southeast and Northeast sections of the country, consistent with prospects for viable per-seat operations that although similar operations have been planned (and some are were found via interviews and discussions with various in- already operating) in the Midwest and on the West Coast. dustry participants, but it should be noted that the implicit as- Some are using small, efficient, next-generation piston-based sumption is that all VLJ service offers in these regions are via aircraft while others have taken deliveries of small numbers the per-seat model and none are with the traditional charter of VLJs. model. Despite the 2008 bankruptcy of DayJet, which was a pioneer It was assumed that per-seat pricing would also entail wait in the development and offering of per-seat on-demand ser- time equivalent to commercial service that offered approxi- vices, current plans from other startups appear to indicate that mately four flights per day; this was valued using the same many still believe that the concept of the per-seat business time-between-departure coefficient that applies to commer- model can be viable. cial air travel. Thus, the benefit of a lower price is partially off- It is useful to consider these operators and their service set by the wait time that one must incur relative to traditional plans in order to make reasonable assumptions about how charter service. such service offers may spread throughout the United States In all other regions, it was assumed that the VLJ mode for the 5- and 10-year forecasts. Careful consideration has would be available by 2012, but only via traditional charter been given to the pricing approaches, geographic location, (per aircraft) with the associated higher cost. For the 2017 and fleet types of such operators in the consideration of how forecast, it was assumed that per-seat pricing would spread to to model a new "VLJ" mode that will be added to the choices the Great Lakes region. Overall, in light of the recent down- available to consumers. turn in the economy and bankruptcies in the market, these baseline assumptions of VLJ availability by 2012 and 2017 may be relatively optimistic. VLJ Mode Attributes The new VLJ mode was represented by taking an average Spread and Distribution of the estimated operating cost and capacity attributes of sev- of Low-Cost Piston Services eral models. In addition, the VLJ mode was assumed to in- herit the same alternative-specific constant, cost, and airport The analysis also takes account of the likelihood that low- jet presence coefficients as the air taxi light jet mode. As with cost piston air taxi services using efficient new-generation the other air taxi services, cost to the traveler was estimated aircraft will expand beyond current service areas centered in using a 75% markup to the aircraft operating costs estimated the Southeast region of the United States. For the baseline in the Conklin & de Decker data. forecast, it was assumed that low-cost service would replace higher-cost traditional piston service in the rest of the South- east, Southwest, Western Pacific, and Great Lakes by 2012. Spread and Distribution of VLJ Per-Seat By 2017, it is assumed that traditional piston services are re- versus Traditional Charter Services placed by low-cost alternatives entirely throughout the United It is believed that a per-seat pricing approach still could be States. the foundation for a successful business model for VLJ air taxi services, although the prices may need to be somewhat higher Other Modes than initially estimated or selection and utilization of aircraft type may need to be altered. With the exception of the impact of fuel prices on total To assess the potential impact of the per-seat approach to cost (see below), the attributes of the remaining modes-- air taxi services, an analysis of actual fares offered for per-seat automobile, commercial air, and air taxi turboprop and light services in 2008 was undertaken. On average, it was found jet--were assumed to remain constant for all geographic that per-seat prices with a 3- to 4-h departure window were regions through the forecast years 2012 and 2017.